European Parliament Weighs Changes to Payment Industry Regulation
The European Parliament is set today to discuss changing regulation regarding multilateral interchange fees (MIF), the fee which merchants pay to a customer’s issuing bank.
The Directive on Payment Services (PSD), published in July by the European Commission sought to give an overview of the regulatory issues surrounding emerging payments.
These two issues serve as backdrops for the Commission and the European Parliament to debate amendments capping of MIFs to 0.2% for debit cards and 0.3% for credit cards. Some members of the European Parliament view the MIF caps as arbitrary. Others want to discuss promoting merchants to use the “honor all cards rule,” which the Commission had wanted outlawed.
Merchants have responded negatively to these proposed amendments. EuroCommerce, representatives of the retail industry in Europe, had strong opposition to the proposals, claiming that both merchants and consumers would not benefit since they felt these new regulations did not go far enough to curb interchange fees.
The single European Payments Area (SEPA) is an initiative that aims to create a more unified and competitive payments industry across borders. Card issuers feel that an interchange policy that’s a “one-size-fits-all” approach does not take into account the many factors that go into influencing the rate of fees and the costs of operating within different countries.
Though both merchants and card issuers are battling for their own interests, there is no guarantee that any change will benefit the consumer in the long run.